FIRST HOME BUYERS TAKE ACTION
First home buyers are now flooding back into the Australian housing market according to recent statistics released by the Australian Bureau of Statistics (ABS).
Current stats show that there has been a marked upturn in sales to first home buyers over investors in both the NSW and Victorian markets recently.
The increase in first home buyer sales could be to do with extra incentives such as according to property research analyst Cameron Kusher of CoreLogic. “Over recent years, first home buyer activity has generally been tracking below average, however, each state and territory offers some level of incentive to first home buyers including grants and tax concessions” he said. Some States and Territories have increasingly offered stamp duty reductions for buyers with these going live last year in NSW and Victoria resulting in a slowdown in investor demand, activity from the first home buyer segments has climbed over the past year.
The ABS statistics state that nationally, there were 8,782 housing finance commitments in February 2018. although the volume of loans was down on levels in late 2017, it was 33.1% higher than the previous February. As a share of all owner occupier commitments, first home buyers accounted for 17.9% in February 2018 compared to 13.3% the previous year.
In other states, the statistics look slightly different with Queensland reporting “First home buyers accounted for 19.3% of the market in February 2018 compared to 17.6 a year earlier”.
In South Australia, despite house values being the lowest of any mainland capital city, ‘has the lowest share of first home buyer activity of any state or territory with 13.0% of owner occupier commitments going to first home buyers. Last year they accounted for a 10.5% share.
Trends in Tasmania, ACT and the Northern Territory show that first home buyers, although contributing to overall sales, are not the main market that is buying homes currently. In fact, in Western Australia there were fewer commitments to first home buyers than there were a year ago.
Overall, these trends show that property values in Sydney and Melbourne are declining at a time in which first home buyer activity is rising. It will be interesting to see what happens in the market next.
INFLATION SHOWS STEADY GROWTH
Australia’s first quarter consumer price index is still tracking below the Reserve Bank’s preferred target band, but inflation has risen by 1.9%.
ABC News reported that the “inflation pulse is still weak” and “still below the RBA’s 2 to 3 percent band.
The changes in inflation have been contributed largely to “gas (+6%) school fees (=3.3%) offset by overseas travel (-2.4%) computer services (-6.1%)
A breakdown of the data showed competition in numerous industries including retail, insurance, finance and telecommunications.
“NOW’S THE TIME”
If you’re thinking of taking the plunge and buying a property in NSW, now could be the perfect time.
A news.com.au article published recently stated that the ‘sleepy’ Sydney property market was about to awaken and ‘begin steadily marching upwards again’
The NSW and specifically the Sydney market has been perceived as “bottoming out” over the past few years, but analysts say that the market slump is now over.
CoreLogic released market specific data last month that highlighted: “Sydney median home prices fell by just 0.3% over March. That was half the rate of decline over February and just a third of the 0.9% falls recorded over January and December. The March price fall was also the smallest since the 0.1% decline in September when the market’s run of price declines first started.
In Sydney a typical home now costs $880,000 as opposed to $900,000 at the same time last year, so prices are down an average of 2.1%.
CoreLogic’s head of research Tim Lawless warned that the downturn was easing and that prices would now continue to rise “If current trends continue we could see a return to growth in only a few months” Lawless said.
According to the article, two factors are helping to increase house prices in the NSW market; banks not shutting out investors and every buoyant overseas migration. Developers are also struggling to keep up with current housing demands.
To avoid the predicted price rise, house hunters are advised to buy as soon as possible to make substantial savings.
HOBART MARKET NOW HAS THE “SYDNEY FACTOR”
A business outlook report put together by industry leader Deloitte shows that Hobart’s housing market looks much like Sydney’s did two years ago.
The report shows that Hobart has the trifecta of factors that led to the massive growth in Sydney in 2016 including the fastest house growth in the country, very low residential rates and rising residential rents.
It looks like predicted Hobart price rises may continue. Watch this space for an update!